Nvidia (NASDAQ:NVDA), without a doubt, has emerged as the biggest beneficiary of the AI (Artificial Intelligence) revolution. Moreover, its HGX platform is termed as the engine of generative AI and large language models. While NVDA’s chips lead the AI space, its dominance makes it hard for smaller rivals or startups to prosper.
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Per a Reuters report, funding is drying up for smaller rivals, who are building AI chips to compete with Nvidia. Venture capitalists are unwilling to provide significant funding to these startups as they see them as risky bets and expect a lesser chance of their success, given NVDA’s dominance.
Highlighting PitchBook data, the report said that the chip startups in the U.S. have received $881.4 million in funding through the end of August 2023, much lower than the $1.79 billion granted in the first three quarters of 2022. Further, the number of deals has also gone down.
While startups struggle to remain afloat and create a competing product, Nvidia continues to grow rapidly. The enormous demand for its accelerated computing and AI platforms has enabled it to double its top line year-over-year in Q2. Moreover, its Data Center compute revenue nearly tripled due to the accelerating demand for the HGX platform from consumer internet companies and cloud service providers. Thanks to the strong financials and robust demand, NVDA stock has risen over 209% year-to-date. As Nvidia stock has appreciated substantially, let’s check whether it could increase further.
Will Nvidia Stock Keep Going Up?
Nvidia stock could continue to trend higher due to the tremendous demand for its AI platform and supply chain improvement. Thanks to the favorable operating and solid demand environment, Wall Street analysts are bullish about NVDA’s prospects and see further upside in its stock price.
Nvidia has 40 Buy recommendations from 41 analysts covering its stock. Meanwhile, analysts’ average price target of $636.32 implies a significant upside potential of 40.85% from current levels.
